By Emily Stephenson | Reuters
The U.S. credit union regulator said on Wednesday it filed a lawsuit against U.S. Bank and Bank of America over mortgage securities sold in the years leading up to the financial crisis.
The National Credit Union Administration (NCUA) said the banks broke state and federal laws by failing their duties as trustees for 99 residential mortgage-backed securities trusts.
The banks sold $5.8 billion in securities to five corporate credit unions that later failed after the products lost value. The regulator accused U.S. Bank and Bank of America of knowing about defects in the mortgage loans but not providing required notices to the investors.